Group Dental Practices Growing in Number, Still Need Study

Caroline Helwick

November 05, 2013

NEW ORLEANS — Group dental practices still constitute only about 5% of all dental practices and are not yet well-characterized. However, group practices are a growing trend that could change the dental practice landscape, according to speakers who discussed the practice model here at the American Dental Association (ADA) 2013 Annual Session.

"There's a major shift from the small to the large practice," said Howard Bailit, DMD, PhD, from the University of Connecticut, Farmington. "Solo practitioners constitute only 18% of dental practices today. When I started practice, this was 60% to 70%."

The group practice movement is not a "tidal wave" but, rather, a "slowly growing movement," said Marko Vujicic, PhD, vice president of the ADA Health Policy Resources Center. "Our experts say that the group practice model still involves only about 8,000 dentists (4% - 6%) in the United States, so it's still a fairly small share, but it's where the future is going."

Have a Sound Business Plan

Whatever the practice model, dentists should have a sound business plan that is relevant for today's climate. This is especially true for dentists considering consolidating or otherwise altering their practice model, Dr. Bailit said.

The plan should cover the next 5 years and be updated annually, and it should be geographically relevant, he continued.

"Remember that dental care is local business. Your strategy needs to be for a specific market segment and geared to a specific local area. Don't think that moving your model to a different setting without understanding the new market is smart," he said. "Also know that your ability to manage a large organization is your primary 'added value'; that is, your management team is very important and is the key to your success. Invest in a good management workforce."

Dr. Bailit suggested that dentists looking for new markets think outside the box. For example, he noted that the middle-to-lower-income population remains underserved and that this creates a business opportunity.

"The high-income segment is well served. Those with the least money have the least access to care but need it the most, and this population is your opportunity," he said.

Federally qualified health centers and school-based dental care are other options for expansion. "There are many special opportunities to keep your eye on, as you build up your capacity," Dr. Bailit said.

Need to Clarify the Group Practice Model

Dr. Vujicic, a health economist, emphasized that the new practice models are still a work in progress and need clarification. The ADA has a number of research projects underway to try to fill the information gap and bring some understanding to this movement.

"My team has spent considerable time trying to come up with definitions and a nomenclature for group practices," he said. This model has been called a number of things, including large group practices, corporate group practices, Wall Street investor–driven dentistry, and venture capital–funded dentistry. "We want to distil the real issues pertaining to this new model."

The new model tends to be a consolidation of individual dentists or practices into a single entity, often outsourcing the nonclinical side of the business (purchasing, scheduling, setting fees, marketing, and so forth) to a for-profit management company. Traditionally, dentists have been internally self-contained operations with no outsourcing.

"How does this business relationship impact the dentists' and also the patients' experiences? The risk is that it influences it," he said. "This is where the policy conversations are and where the debate is.

"We want to classify these companies that are contracting with dentists. If they are funded by venture capital and run by people with MBAs, we want to understand this. We need data," he emphasized.

Research being conducted by the ADA will evaluate whether there are differences in efficiency across the care delivery models (ie, whether larger practices can be more efficient), whether dentists in corporate group practices are being asked to satisfy quotas (as has been reported) or otherwise conform to unreasonable demands, whether providers are generally more satisfied within one type of practice vs another, and whether there are differences in number of procedures, quality of outcomes, and patient satisfaction per model.

The new healthcare environment, he added, is one in which patients and third-party payers are going to expect proof of quality and value. To address these challenges, dentists need a new skill set that has not been well established through the formal dental education process, he said.

"The practice management curriculum in school is slim, and it does not prepare dentists for the real world," he maintained. "There will be lots of demand for a skill set that can help clinicians navigate in the new environment, such as working with systems for reporting quality measures."

The speakers agreed on the main message: the dental care environment is changing, and it is challenging. Practice consolidation will continue to grow, and dentists will feel pressure to do more with less and to show outcomes accompanied by data analysis. Organizations that have a skill set to handle this will be the survivors.

How One Practice Did It

Attendees were interested in hearing from Ralph Howell, DDS, from Atlantic Dental Care PLC in Virginia Beach, Virginia, who commented on his own experience during the discussion period.

Dr. Howell, one of the executive directors of the network, said his practice grew from a solo practice, to a 5-person practice, to a network of 56 dentists (soon to be 65) who are involved in 33 independent practices. Atlantic Dental Care is now the largest dental entity in Virginia.

Although Dr. Bailit had indicated that no data have yet established that "efficiency of scale" exists in dental care delivery, that is, larger practices do not necessarily practice more efficiently than smaller ones, Dr. Howell said his practices have definitely established greater efficiency since consolidating. Each practice is an "S" corporation, and all S corporations feed into the single limited liability corporation that is Atlantic Dental Care. They have a common payroll system, pension fund, liability provider, and so forth, but each division pays its own bills. The group meets monthly to discuss "universal issues," he said.

The group has just started to negotiate laboratory fees with a provider and may actually develop its own laboratory. "Our model was an [obstetrics/gynecology] practice in our area that started 8 imaging centers, and this has been a huge revenue stream for them," he said. "We are asking what we can do collectively to create greater efficiency."

Dr. Vujicic is employed by the American Dental Association. Dr. Bailit and Dr. Howell have disclosed no relevant financial relationships.

American Dental Association (ADA) 2013 Annual Session. Presented November 2, 2013.

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